Category: Mis-sold Investment

With all of the recent furore surrounding Payment Protection Insurance and its mis-sale, sadly a number of other areas in relation to banks, financial organisations and brokers have gone under the radar as they are not as media friendly to promote as Payment Protection Insurance is. They do not sadly cover the same number of readers for a media outlet to get involved in and, in many cases, are more complicated to explain.

The mis-sale of investments can be wide ranging and include various Investment Bonds, ISAs as well as other insurance-related products such as Income Protection Plans and Critical Illness Policies. Indeed, as recently as 2013, Lloyds Bank was fined £28million by the Financial Conduct Authority over the way that staff were pressurised to sell various insurance covers and investments.

In other words of the 700,000 customers who were sold products between 2010 and 2012 by Lloyds Bank, most of them were sold in a way that generated a healthy commission for the seller, and of course the bank, rather than the clients having a product that was suitable for their needs.

Whilst highlighting Lloyds Bank, this way of selling has always taken place, and indeed it is quite frightening to believe that Lloyds Bank would consider selling in this way bearing in mind this was in the midst of the payment protection scandal in which it was already paying out considerable sums of money.

Therefore, it is essential for any individuals who have any form of investment or protection policy with any of the large lenders or the various financial institutions or brokers that promoted the products to review these. If they felt that, in whatever way, the policy was not right for them, they felt cajoled into taking out the policy, or that they had policies that were in place which the bank chose to ignore (or did not enquire about), then there is the potential to recover considerable refunds and compensation.

With regards to pure investments where the client has a sum of money to invest and the bank invests this, the bank should adopt strict rules to make sure that the risk of the investment is appropriate to the financial position and requirements of that particular client. For instance, if a young widowed mother receives a payment from a life policy of £200,000 and she looks at investing this for her child’s future where she has little or no other assets or savings, then the bank or investment business should take this into account and offer a low risk product that the client is able to gain access to relatively easily and provide some sort of flexibility. Likewise, if a multimillionaire came into the bank with a similar amount, then their ability to take more risk is that much greater, if that is their requirement. You can see by this example that one product can be sold to two individuals, but the individual circumstances of both MUST be taken into account and if they are not, recompense and compensation has to be paid.

As a client, if you have a product already in place, for instance Life Insurance or some sort of Life Cover which has Critical Illness Cover attached and the bank is selling a Loan facility or Mortgage, then they are required to take your previous policies into account and not insist on you cancelling and taking out their products in turn.

Ultimately the most important part of any sale is whether you, as a customer, are happy. Are you happy with the investment that you have taken and the risk that was attached to that investment? Are you, as a customer, happy with the long-term saving product or pension annuity or regular premium investment that you have taken? Are you, as a customer, happy with its performance and were you encouraged to take this policy and shown benefits which were far greater than is achieved? Were you, as a customer, happy with the lump sum investment that you made (in whatever product that was available) and were you given a risk with that investment that you were happy with, and that you fully understood?

The way that Banks treat clients has completely changed in the last few years, where the onus is now on customer power to obtain the right thing. Therefore if you feel that there is any way that the Bank(s) or Investment Companies or Broker(s) that you used have not looked after your needs, and/or the products that you have are causing you some concern, for whatever reason, (these can be products that are in place or have been in place and concluded several years ago) then it is only appropriate that these are reviewed and your concerns are taken forward to satisfy and alleviate those concerns that you have. If your current concerns are not alleviated, and discrepancies have been found, we can then approach the Lenders to award compensation and to place you in the financial position you would have been in should these discrepancies not have occurred.

We have been dealing with complaints since the late 1990s. Although we have been heavily involved with the various scandals of the day, namely, Bank Charges and Payment Protection Insurance mis-sale, we have always dealt with other complaints, including those of mis-sold investments and we will continue to do so on a “No Win No Fee” basis.